Fixed Amount Contract with Arbitration through your Choice – Universal

Fixed Amount Contract with Arbitration through your Choice – Universal

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Fixed Amount Contract with Arbitration through your Choice – Universal

A fixed-price-contract is also termed as firm price contract. Fixed-Price Contract is a contract in which the buyer agrees to pay the seller a definite and predetermined price. The buyer agrees to pay the seller such a price irrespective of the increases in the seller's cost or the buyer's ability to obtain the same goods at a lower price in the market.

Fixed-price-contracts are negotiated usually where reasonably definite specifications are available, and costs can be estimated with reasonable accuracy. A fixed price contract does not place much administrative burden on the contracting parties. However, this contract subjects the contractor to the maximum risk arising from full responsibility for all cost escalations.

Arbitration is an alternative means of setttling a dispute by impartial persons without proceeding to a court trial. It is sometimes preferred as a means of settling a matter in ordert to avoid the expense, delay, and acrimony of litigation. There is no discovery and there are simplified rules of evidence in arbitration. The arbitrator or arbitrators are selected directly by the parties or are chosen in accordance with the terms of a contract in which the parties have agreed to use a court-ordered arbitrator or an arbitrator from the American Arbitration Association. If there is no contract, usually each party chooses an arbitrator and the two arbitrators select a third to comprise the panel. When parties submit to arbitration, they agree to be bound by and comply with the arbitrators' decision. The arbitrators' decision is given after an informal proceeding where each side presents evidence and witnesses. Arbitration hearings usually last only a few hours and the opinions are not public record. Arbitration has long been used in labor, construction, and securities regulation, but is now gaining popularity in other business disputes.